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To: LLCF who wrote (5003)	6/15/2001 11:36:04 PM
From: marek_wojna	Read Replies (1) \| Respond to of 74559

<<Great example... so let's say "quality of life" is up 100% per year using any method you wish... so Greenspan should be able to have 96% inflation using the old method and claim 4%??>> LOL. A GOOD ONE.

To: LLCF who wrote (5003)	6/15/2001 11:43:32 PM
From: Ilaine	Read Replies (2) \| Respond to of 74559

The government "adjuster" is to keep from comparing apples and oranges. I don't see how it adds anything to analysis of GDP - yes, a PIII is faster than a 286, but we're looking at such gross numbers, how can there be any meaningful adjustment? It makes much more sense when you are trying to look at CPI, which has always been a "market basket" approach. If in year 1980 the market basket includes a microwave oven - to use a less emotionally laden example than computers - which costs $500, how do you compare a microwave oven bought in 2000? The new one will probably be much bigger, more powerful, with additional features like a rotating plate on the floor, and will still be cheaper, maybe $200. But to be meaningful, you'd have to somehow compare a 2000 microwave that is just as small, just as weak, and just as featureless as the 1980 model, just to get at the most basic price differential.

To: LLCF who wrote (5003)	6/15/2001 11:47:31 PM
From: KyrosL	Read Replies (1) \| Respond to of 74559

>>all these wonderful things should boost output and would already show up in the numbers But they do show up in the numbers. Even if you take out the hedonic adjustment for computer manufacturing, the US GDP has expanded vigorously in the last few years. This is corroborated by the substantial increase of Government tax receipts -- both Federal and State. So there is no question that US GDP has grown briskly in the last few years. The contention that US GDP growth is largely due to hedonics is pure BS. I have been pretty bearish towards the markets for the last couple of years, and expect the economy to get a lot worse before it gets better, but that does not mean that I accept as fact all the paranoid crap accepted as gospel by the perma-bears. They are almost as bad as the perma-bulls at the height of the mania. Kyros